LA's Regional Airports Secure New Carriers

Jennifer Oldham On Feb 5, 2007
Source: The Los Angeles Times

Providing lift to a decades-long effort to redistribute air traffic among the region's airports, a new airline will announce Monday the largest expansion in LA/Ontario International Airport's history, with nonstop service to 14 cities not currently served by carriers there.

At the same time, Los Angeles officials will unveil plans to reopen LA/Palmdale Regional Airport with the first scheduled commercial flights in nine years.

Despite past difficulties in spreading out air service and some skepticism in the airline industry, the city's airport agency hopes the additions will ease overcrowding at aging Los Angeles International and entice other carriers to add flights in Ontario and Palmdale. Los Angeles World Airports operates both the Inland Empire and Antelope Valley facilities.

"These are great first steps," said Matt Szabo, a spokesman for Mayor Antonio Villaraigosa, who has pushed for more service at outlying airports. "It will provide more convenient alternatives for air travel in and out of Southern California."

Starting in April, ExpressJet Airlines Inc. will offer 29 daily nonstop flights from Ontario to cities including Albuquerque; Boise, Idaho; Colorado Springs, Colo.; Fresno; Monterey; and Oklahoma City on 50-seat regional jets replete with leather seats and satellite radio. Daily nonstops to Omaha and Tulsa, Okla. -- not currently available at any other Southern California airport -- are also on the schedule. Ontario will be the busiest facility in the new airline's network.

"This is a perfect case where you have an airport in a pretty fast-growing part of a big metropolitan area where the service hasn't been developed to a lot of communities," said James Ream, ExpressJet's chief executive.

From Palmdale, United Airlines will offer two daily flights to San Francisco International Airport on 50-seat regional jets starting in June. Airline officials acknowledged they wouldn't be providing service at the unused facility if it weren't for $2.3 million in revenue guarantees offered by the airport agency and the city of Palmdale.

Expanding Los Angeles' far-flung airports is essential for the region's economy. Air traffic in the Southland is expected to double by 2030, even as existing facilities, including those in Burbank, Santa Ana and Long Beach, cannot accept more flights because of noise restrictions or the inability to build new terminals. LAX is also handling 50% more passengers than it was built for, and officials signed an agreement with airport-area communities promising to limit growth there to 78 million travelers annually. The airport served about 61 million in 2006.

Southern California officials tried unsuccessfully for years to figure out how to make the region's airports work as a system, but were hampered by parochialism and the refusal of some communities to build new facilities or accept more flights.

Officials hope new service at Ontario and Palmdale will entice carriers to add flights -- in part because new revenue flowing to Los Angeles' airports agency from the new service will help bring down fees for all carriers at both facilities. Yet travelers would have to be willing to make long drives. Ontario is nearly 38 miles from Pasadena, for example, and Palmdale is 44 miles away.

"The first step is the most important step," said Steve Erie, a UC San Diego political science professor who has studied the region's airports. "With the airlines, there's an incredible herd mentality, and they do play follow the leader."

But airline analysts caution that increasing competition could also backfire if other carriers offer flights on larger aircraft with lower fares to cities that ExpressJet serves. They cite the experiences of other regional airlines that stumbled after switching from feeding passengers to larger carriers to offering their own service. ExpressJet will have to overcome its lack of experience in operating a stand-alone airline.

"It's just not a model that works," said Robert Mann, an aviation analyst at R.W. Mann & Co. "These guys don't have a track record operating a full-service airline with all the costs it entails and more risks."

ExpressJet, once wholly owned by Continental Airlines, has about 200 airplanes that feed passengers to its former owner, which spun the company off in 2002. Its new venture will launch with 44 Embraer jets that will serve 24 cities.

Company officials say they will make money by catering to business travelers who want to save time by skipping hubs and flying directly between small- and medium-size towns. Fares will be competitive with low-cost carriers for travelers who book early and run up to $320 one way for a last-minute ticket, said Ream, the airline's chief executive.

The company's jets are more economical to run than bigger aircraft operated by larger carriers, he added, and its strategy of flying "point to point" and skipping hubs will help the firm avoid going head to head with more established airlines.

"I think we can develop these markets, stay out of fare wars, and offer something customers don't have today," Ream said.

ExpressJet's flights will boost the number of daily departures at Ontario by 25% and increase the number of nonstop destinations by 63%. Los Angeles World Airports estimates that up to 750,000 people could use the service in its first year -- a number equivalent to the traffic growth at the airport over the last decade.

The facility lost several flights last year.

Ontario business leaders, who long have courted more service at the airport, expressed enthusiasm about the new flights, even though the carrier's identity has been a tightly kept secret up to now.

"You always have this connection you have to make out of Ontario ... to go through Salt Lake City, Denver or Dallas," said Connie Page, who owns Rancho Cucamonga-based Escape Plaza Travel and does more than half of her business with corporate clients.

"The weather delays last year really contributed to a lot of discontent with businesses," she said. "I can see that being a very big bonus for businessmen, if they can get from A to Z ... they'll be happy."

In Palmdale, officials were cautiously optimistic about new flights at the 35-year-old airport. Repeated attempts by airlines to offer service there over the last few decades never got off the ground. Scenic Airlines, a sightseeing company with flights to Las Vegas, pulled out last February, saying it wasn't making any money.

Although they contend there are enough people who fly in Palmdale and Lancaster to support the new United service, local economists questioned whether the region as a whole is ready to patronize an airport in the Antelope Valley.

"It's all a matter of timing," said Mel Layne, president of the Greater Antelope Valley Economic Alliance. "My fear is that many things are not in place today to make it a success -- such as interconnection with the San Fernando Valley, so they can see the value of coming to Palmdale Airport, rather than going to LAX."

Los Angeles' airports agency says it will aggressively promote the new service to encourage travelers to use the smaller airports. In Palmdale, it plans to hire an agency to place ads for United's service in parking lots of major aerospace firms and at gas pumps.

"This new service by United Airlines represents the last and best opportunity [the agency] has to establish viable nonstop service" at Palmdale, agency officials wrote in a report to airport commissioners.